LW Economic Conundrum: New Caliphate / No Border

There are always multiple ways to view history – even as it is occurring before our very eyes.

When the US was in its last economic depression, we had the roll-out the new government in Germany back in the 1930’s.

To follow up on my Sunday post about the new [global] Caliphate, I’ve been eyeing a timeline of Germany in the 30’s (try here) to see if the ISIS/ISIL people are somehow (perhaps unwittingly) falling into an historical rhyme with Hitler’s rise to power?

As long-time readers know, I’ve been debating for some months now, whether the economy peaked (for good) in 2000 (the Internet Bubble) and whether the present illusion of recovery is simply due to massively dislocated economic resources.

In 2000, the high Dow was around 11,723. And, when we put that into the Minneapolis Fed Inflation calculator, we infer that the Dow would only need to be at 16,080 in order to have held onto parity on a purchasing power basis.

Since the Dow closed Friday at 16,851, an initial argument could be made that investing in the Dow would have netted a person a 4.8% return since 2000.

Frankly, holding on to the Dow stocks for 14.5 years for a real return of 4.8% doesn’t exactly get me excited, but maybe you have a lower threshold than I do.

If you held onto any of the turkey’s in the 2000 “Dow” you could have accumulated large losses and how much of that 4.8% illusory gain could have been actualized (after commission just to keep up with the jumble of changes) would be far beyond the scope of a one-cup article.

The S&P has a different picture: The high in 2000 was 1,552.87 which would be 2,130.13 on an inflation-adjusted basis today. Since the S&P closed about 1,961 last Friday, if you’d simply traded the S&P since 2000, on an inflation-adjusted (purchasing power) basis, you’d be down about 8% after 14.5-years of worry.

Gold, on the other hand, touched $316 momentarily a couple of times in February of 2000. And, correcting for inflation through present that pencils out to just $433.47.

With the spot price of gold around $1,310 this morning, the return on gold is right around 3-times. Just ever so slightly better than an illusory 4.8% or a –8%, but it’s early in the math day for me.

Still, I’m left wondering this morning if besides bringing in an underclass to pay for Social Security and other soon-to-be-broke promises without compliant (and not tax-savvy) Tech Age Slaves, if maybe another reason for the Pelosi border pomp this weekend wasn’t to welcome new buyers of paper to America.

People without a great deal of financial sophistication ought to be fine grist for the financial shills….and as long as the paper lies hold, the people in the Big Houses on Long Island will make out like what they are: Bandits and nutech slavers.

The logic of a secure border aside (Chinese are coming in that way now), he’ll no doubt be branded a racist for trying to stem the influx of OTMs and MS-13 members, which is about the damnedest twist-up of logic you’ll find lately.

The end game: This will be an excuse to print money and to manufacture another “holding action” to keep the economy from collapsing in a long wave economic heap.

The cynical believer in longwave economics note how many of the 1930’s management tools have already been pulled:

Record low interest rates

The Fed ballooning its balance sheet by $4 trillion to keep any of the big players from feeling loss